The devices are understood to be offered to those with poor credit scores – but financial watchdogs say lenders could be breaking the law, it’s reported.

Kill switches are being installed by car insurance firms and can cut out car engines if payments aren’t met

Customers usually set up a monthly standing order and once the lender is paid, the driver is sent a code to enter by remote control into a GPS device behind the dashboard.

If they miss a payment, a code for that month won’t be sent and the car stops working – potentially leaving people stranded.

The devices are small, black GPS boxes installed behind the dashboard and connected to the ignition.

If a payment is due, the box will beep giving a 24-hour warning that the car will immobilised, however if it’s not met then the circuit is broken and prevents the car from starting.

Frank Brown, a consumer credit expert at regulatory consultancy Bovill, told ThisIsMoney.co.uk switches could be used to immobilise a motorist’s engine outside a supermarket when there are children and shopping in the vehicle.

The Car Finance Company told the newspaper it provides emergency codes to cars can be moved to a secure location and they won’t cut out while moving.

Mr Brown also said that the devices can tempt lenders to make loans to high-risk customers because they feel more confident they’ll get the car back if the repayments stop.

Julia Martin, 32, took out a three-year hire-purchase agreement with The Car Finance Company in January last year after he fiance left her six weeks before their wedding.

The office worker, from Farnham, Surrey, pays £199 a month for a ten-year-old Ford C-Max, worth £4,000 – but will have paid £7,200 by the end of the deal.

The kill switch devices are understood to be offered to those with poor credit scores

She told the Daily Mail: “I have had to take a second job and still find myself struggling each month.”

Graham Hill, of the National Association of Commercial Finance Brokers, told the newspaper kill switches may break the law.

It was previously reported that the Financial Conduct Authority (FCA) is already carrying out a review of the car loans market and kill switches are understood to form part of the probe.

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